Black industrialists programme to get R40bn boost, says Ebrahim Patel
BUSINESSLIVE / 11 JULY 2019 - 21:20 / BEKEZELA PHAKATHI
The government will accelerate efforts to support black industrialists, trade & industry minister Ebrahim Patel said on Thursday.
The programme supporting black industrialists is seen as one of the key elements of the contentious broad-based black economic empowerment (B-BBEE).
Ebrahim Patel. Picture: TREVOR SAMSON
The programme aims to unlock the potential of black industrialist companies in key sectors of the economy through deliberate, targeted and well-defined financial and non-financial interventions.
“To enhance the growth of black industrialists, we will combine the efforts of the department, the IDC [Industrial Development Corporation] and the NEF [National Empowerment Fund] into a seamless and coordinated programme,” Patel said during the budget vote debate on trade and industry.
The minister said that over the next five years government would support an additional 400 black industrialists’ projects with financial support of R40bn through identifying sustainable businesses and promoting both industrialists, new enterprise formation and worker involvement in the enterprises.
B-BBEE is a controversial issue in SA. Last week Patel conceded that black economic empowerment laws in their current form needed a “rethink” as they had not always produced the required results.
The DA, the main opposition party, has rejected B-BBEE in its current form, saying it is being used by the ruling ANC to enrich only a few of the politically connected elite at the cost of job creation.
The DA wants a “vastly simplified” B-BBEE scorecard with the inclusion of time frames for initiatives to help the business sector to plan. It also says its approach will set requirements, as part of the scorecard, to ensure that the beneficiaries of B-BBEE were genuine and not politically connected people.
DA MP and trade & industry spokesperson Dean Macpherson said party leader Mmusi Maimane had highlighted that the “biggest reform we need to see is to scrap B-BBEE and put an end to the rent seeking, cost inflation and patronage network this system has become”.
“We must develop a new model of genuine redress and inclusive growth that creates a shared future that all South Africans can be a part of, one that recognises real disadvantage, talent and opportunity.... This is exactly what the DA is doing with passion and purpose. I believe that the time is now, and we dare not miss this chance,” said Macpherson in his debate speech on Thursday.
In his debate speech, Patel also touched on the African Continental Free Trade Area (AfCFTA) which will connect 1,2-billion people into a single bloc with minimal tariffs. He said the agreement set down the basis for increased intra-African trade and could cement the continent’s position as the next growth frontier.
The implementation phase was launched on Sunday, at a special AU summit in Niger, after 54 countries signed the agreement and 27 countries ratified it. It is intended to come into full effect on July 1 2020.
“The agreement will fundamentally change and reshape the South African economy. Already, exports to other African countries support about 250,000 South African jobs and it is the fastest-growing part of our manufactured exports,” said Patel.
“For the period of this administration, there is an enormous amount of work to bed down the detailed modalities and benefits of the AfCFTA.”
Patel said that starting immediately government will finalise a tariff schedule of products to be covered by the AfCFTA agreement as well as rules of origin, which set out what qualifies as a locally manufactured article.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER